What is the Coronavirus Job Retention Scheme?
The Coronavirus Job Retention Scheme (CJRS) is financial support offered to employers by the government to pay the wages of those staff who would otherwise have been laid off or made redundant during the current pandemic.
Who is eligible for the scheme?
Any employer who had a UK bank account and a PAYE payroll scheme on or before 28th February 2020 is eligible for the CJRS.
Employers need to:
- Select and inform the employees affected that they’re furloughed
- Keep employees on the employer’s payroll
- Make sure the furlough lasts for at least 3 weeks
What does furlough mean?
Furlough means a temporary leave of absence from work. Furlough leave has been temporarily introduced by the government during the coronavirus pandemic to help to keep employees on the payroll without them working. As the furloughed staff are kept on the payroll this is different to being laid off without pay or made redundant.
How will employees be selected for furlough?
Employers must select employees in a fair way to avoid discrimination. Where 20 or more employees are affected employers will need to consult the member’s representatives (collectively consult). At FMUK this process has been completed with Unite the union and the staff representative (Burnley) and with the Work’s Council (Derby).
How do I let you know that I’m happy to be furloughed?
The furlough has been approved by the employee representatives through collective consultation. If you are happy to be furloughed then there is no need to contact us.
If you disagree with the decision to be furloughed you should contact us. You will be laid off without pay if you do not wish to be furloughed.
What is the collective agreement?
The collective agreement is a document approved by both FMUK and your employee representatives. This outlines the conditions of the furlough agreement and includes a summary of employees affected and how much each employee will be paid. The major points of this have been included in the email or letter that we have sent to you regarding the furlough.
How much will I be paid?
HMRC (HM Revenue and Customs) will reimburse 80% of furloughed workers’ wage costs to employers, up to a maximum of £2,500 per month gross.
To ensure that we are treating all of our members fairly and consistently, FMUK will pay all members 80% of your regular wage irrespective of the £2,500 government cap.
Fees, commission and bonuses should not be used when working out the 80% figure.
Regular contractual overtime payments and shift allowance will be included.
How is the 80% figure calculated?
Employers claim for the higher of either:
- The same month’s earning from 2019; or
- Average earnings for the 2019/20 tax year
If you have been employed with FMUK for less than 12 months we will use an average of the actual monthly earnings since your start date.
For members who only started in February 2020 your earnings will be calculated on a pro rata basis.
Are furlough payments taxable?
Yes, your furloughed wages are subject to income tax and National Insurance (NI) as usual.
You will also continue to pay your pension contribution unless you have already opted out.
Can FMUK top up the CJRS so that members get 100% pay?
FMUK are not receiving any income from our customers during this period and we still have many other plant overheads to pay. Additionally, the current furlough scheme that we are implementing will cost FMUK approximately £50,000 per week, even after we have claimed the CJRS grants from the government (due, in part, to the tax on those grants). Unfortunately, this means that the company is not able to top up payments to 100%.
Can the company offer any loan options to increase what I am being paid to above 80%?
No. FMUK are not able to offer any loan option to our members at this time.
Will I owe anything back to the company or the government on the CJRS?
You will not owe FMUK or the government for any eligible payments made under the CJRS. If you or the company became ineligible for the scheme then any overpayments made to you could be deducted from your future earnings by FMUK.
Can any employee be furloughed?
Yes. Employees (full and part time), agency workers, flexible or zero hours workers, apprentices and directors can be furloughed providing they were on the PAYE payroll as of 28th February 2020.
What about employees who started work with FMUK after 28th February?
The government guidance is that a worker must have been on FMUK’s PAYE payroll as of 28th February 2020 to be eligible for furlough status. As such, these employees are not eligible. We will contact these members individually to discuss how we are able to support them.
What about members on maternity, paternity, adoption or shared parental leave?
Employees eligible for statutory maternity pay or allowance can claim up to 39 weeks’ statutory allowance as normal. The same applies for normal paternity or adoption leave and shared parental pay rights.
FMUK will continue to offer enhanced contractual rights as these are included as wage costs that can be claimed through the CJRS.
What about members who are on sick leave?
Members who had a current sick note prior to the collective agreement being in place (6th April 2020) will be paid their standard sick pay until this note expires, after which they will be furloughed. If the member is still unfit for work and submits another sick note then they will be paid sick pay at the statutory rate.
Members who fall sick during the furlough period do not need to notify us of their illness and will continue to be paid under the CJRS scheme.
Will everyone be furloughed?
A small number of members cannot be furloughed as they still need to work during this period. For example, the finance team are still required to ensure that payments are made. We have considered every position in the business and will furlough everyone that has no essential work to carry out.
Can I work for FMUK whilst I am furloughed?
No, to qualify for the scheme the furloughed employee must not undertake work for the employer at all while furloughed.
How long could I be furloughed for?
To be eligible for the CJRS a member must be furloughed for a minimum 3 continuous weeks. You may be furloughed for any length of time whilst the scheme is in place.
Note: the CJRS is a temporary scheme currently planned to run for 3 months from 1st March 2020 although the government has confirmed that this may be extended if necessary.
What if paying 80% of wages would reduce my pay below the national minimum wage?
The national minimum wage only applies to hours worked. As this payment is being made whilst members are not working the national minimum wage does not apply.
Can I get another job whilst I am furloughed?
If you have more than one employer you can be furloughed from each job. Each job is separate and the cap applies to each employer individually. Alternatively, you may continue to work for one employer whilst being furloughed by the other.
The government has confirmed that an employee can also take up a second job whilst furloughed as long as the contract of employment permits this.
FMUK would require any member who wishes to take another job during the furlough period to contact us for authorisation.
Can I complete voluntary work whilst I am furloughed?
You can take part in volunteer work or training as long as it does not provide services for or generate revenue for FMUK.
Can members be furloughed for a period and then come back to work for a period and then be furloughed again?
Yes, providing that each period of furlough is at least 3 weeks long. As such it is possible that you could be furloughed for 3 weeks, come back to work for a week and then be placed back on furlough for another 3 weeks.
Will I continue to accrue holidays whilst I am furloughed?
Statutory holidays continue to accrue as normal during a furlough period.
Can I take holidays whilst I am furloughed?
The government guidance is not clear as to whether holiday pay could be claimed under the furlough scheme. To prevent the possibility of a claim being refused by HMRC we will cancel all holiday bookings within this period and credit them back to your annual holiday entitlement.
What rights do I have whilst furloughed?
Other employment rights are not affected. This includes but is not limited to Statutory Sick Pay, maternity rights, other parental rights, rights against unfair dismissal, statutory redundancy pay.
What happens at the end of the furlough period?
FMUK will give a minimum of 48 hours’ notice of the furlough period ending. Members will return to their current position and existing terms and conditions.
What will happen if I can’t return to work when the company call me back in due to childcare or health concerns?
FMUK expect members to be available to return to work when the furlough period ends, however we understand that some members may have other personal factors that could affect this.
Our current expectation is that we will revert to our existing dependency leave and sickness policies.
How will I know when I am expected to return to work?
You will be notified by text message with at least 48 hours’ notice. You should also check the company’s website for regular updates.
How long will the Government and the Company continue to pay 80% of my wages for?
The 80% CJRS scheme is currently available to claim for up to 3 months from 1st March 2020
For members who earn below the £2,500 monthly cap
You will continue to be paid 80% of your wages until either*:
- The furlough scheme is withdrawn by the government; or
- We return to work
* whichever occurs first
For members who earn above the £2,500 monthly cap
FMUK have committed to pay 80% to all members for up to the first 8 weeks of the furlough period.
If the furlough period were to be extended past 8 weeks the company would have to assess the financial viability of continuing to top up salary to 80%. If this were not sustainable we would revert to the government cap of £2,500/month until either*:
- The furlough scheme is withdrawn by the government; or
- We return to work
* whichever occurs first